Would Mark Minervini consider ALIGNMENT HEALTHCARE INC (NASDAQ:ALHC) a top stock pick?

In this article we will dive into ALIGNMENT HEALTHCARE INC (NASDAQ:ALHC) as a possible candidate for growth investing. Investors should always do their own research, but we noticed ALIGNMENT HEALTHCARE INC showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

Does ALHC pass the Minervini Trend Template check?

The Minervini Trend Template is a set of technical criteria designed to identify stocks in strong uptrends. We can check all the boxes for ALHC:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Unpacking ALHC's High Growth Momentum Rating

Every stock receives a High Growth Momentum Rating (HGM) from ChartMill, ranging from 0 to 10. This rating assesses various growth and profitability aspects, including historical and projected EPS and revenue growth. ALHC boasts a 5 out of 10:

Explosive Earnings Growth

• In the most recent financial report, ALHC reported a 40.0% increase in quarterly earnings compared to the previous quarter. This notable growth indicates positive momentum in the company's financials, suggesting an upward trend
• ALHC shows accelerating EPS growth: when comparing the current Q2Q growth of 40.0% to the previous quarter Q2Q growth of 22.22%, we see the growth rate improving.
• EPS acceleration happened 3 quarters in a row.
• ALHC has demonstrated strong quarter-to-quarter (Q2Q) revenue growth of 50.68%, reflecting its ability to generate consistent increases in sales. This growth highlights the company's effective market positioning and its potential for continued success.
• ALHC has achieved significant 1-year revenue growth of 48.25%, signaling its ability to capture market opportunities and drive top-line expansion. This growth indicates the company's effective execution and its potential for continued success.
• Over the past 3 months, analysts have adjusted their EPS Estimate for ALHC with a 37.99% change. This highlights the evolving outlook on the company's EPS potential.
• With a track record of beating EPS estimates 3 times in the last 4 quarters, ALHC showcases its consistent ability to deliver earnings surprises. This reflects the company's strong execution and its competitive position in the market.

Profitability & Financial Strength

• With positive growth in its operating margin over the past year, ALHC showcases its ability to improve profitability through effective cost control and operational efficiency. This growth underscores the company's commitment to enhancing its financial performance.
• The free cash flow (FCF) of ALHC has seen steady growth over the past year, indicating enhanced cash flow generation and financial health. This trend underscores the company's effective capital management and its ability to generate sustainable cash flows.

Market Strength & Institutional Confidence

• With institutional shareholders at 60.36%, ALHC demonstrates a healthy ownership distribution. This reflects a mix of institutional and individual investors, creating a market environment that may foster increased trading activity and price discovery.
• The Relative Strength (RS) of ALHC has been consistently solid, with a current 99.52 rating. This highlights the stock's ability to exhibit sustained price strength and signifies its competitive advantage.

How does the Setup look for ALHC

The Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For ALHC this score is currently 6:

Although ALHC has an excellent technical rating, the quality of the presented setup is not ideal at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Check the latest full technical report of ALHC for a complete technical analysis.

Concluding

More ideas for high growth momentum stocks can be found on ChartMill in our High Growth Momentum + Trend Template screen.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.